The U.S. economy used to be the most dominant in the world, but now it is falling fast. These are some eye-opening statistics provided by CBS Market Watch and the Business Insider (Snyder):
· 10 years ago, the US was No. 1 in average wealth per adult. In 2010, the US ranked 7th
· In the 2009 "prosperity index," the US was ranked the 9th most prosperous country in the world -- down five places from 2008
· The economy of India is projected to become larger than the US economy by 2050
· One prominent economist says that the Chinese economy will be 3 times as big as the US economy by 2040
· The US has lost a staggering 32% of its manufacturing jobs since 2000
· U.S. News - In 1980, the US imported approximately 37% of its oil. Now it imports nearly 60% of its oil
· Today, the US spends approximately $3.90 on Chinese goods for every $1 that China spends on US goods
· The US has the 3rd worst poverty rate among the advanced nations tracked by the OECD
· Since the Federal Reserve was created in 1913, the US dollar has lost over 95% of its purchasing power
We are currently in one of the most turbulent economies since the Great Depression. Why not fix our economy on the federal, state, and local levels the green way? There are several ways to bring our towns and country out of economic disaster that include a mobilized-youth employment group, subsidies, tax credits, local currencies, community agriculture, and prison employment programs.
What Can Be Done?
The Federal Level:
The current political climate with a divided Congress makes it rather difficult to achieve any legislative victory on a federal level, so I have focused more on the local level for a sustainable local economy.
What is a green economy? A green economy is economic activity with reductions in energy use and improving the quality of our environment. The federal government needs to pave the way for such an economy. A study done by Berkeley has shown that green businesses are in need of government aid in the form of tax credits, subsidies, and low-cost loans in order to help spark the demand for green products (Chapple). The Obama administration has made some headway in this regard through the 2009 American Recovery and Reinvestment Act. The Act has provided (DOE):
$3.4 billion for carbon capture and low emission coal research
The Obama administration could have gone farther and directed the recovery efforts to focus on green jobs. FDR had the New Deal, and this seems to be a similar attempt. Creating green jobs can range from installing household solar heating, generators, weatherizing homes and so on. This would provide construction workers, plumbers, electricians, and other people with paychecks that will stimulate the economy and a long-term benefit of a more sustainable world (Gabel).
A personal solution to creating green jobs crossed my mind when I thought back to the FDR era. FDR created the Civilian Conservation Corps (1933 to 1942) for unemployed men whom were 18-25. This organization put the men to work on conservation and development projects that focused on natural resources. The CCC provided jobs for over 3 million Americans (Conservation). The Obama administration could do the same as the 2009 unemployment rate for 16 to 24 year olds was at over 18% (Coy). Young people ages 18 to 25 could be mobilized to do farm work, support community gardens, weatherize homes, and so on.
The State and Local Level:
Local Currency-
Many local economies fall into the trap of continuous business recruitment and community expansion in an attempt to build prosperity. This can lead to failed attempts at recruitment or even more costs that outweigh any of the benefits. Wal-Mart is a perfect example of this. It has received over $1 billion of public money from local and state governments and free land, water, sewerage service, subsidies, and property tax breaks. From 1980 to 2004, it has received $625 million from local and state governments to open up stores in their municipalities. Ironically, these governments have to provide public assistance (food stamps, etc.) for these workers in the range of hundreds of millions of dollars since Wal-Mart does not pay its workers enough (Parenti).
Local currency is a great tool to keep commercial transactions on a local level and encourage the development and use of local resources. The great part about local currency is that it has the ability to provide low-income individuals with interest-free credit and this encourages the wealthy to spend rather than save and accumulate more wealth. A famous economist, Silvio Gesell, has argued that interest-accumulating currency has been the cause of our boom and bust economic cycles. Most local currency has a limit on debt taken on and others function on peer pressure. Loans might not be given if certain individuals do not pay back balances, or a list is published of those who have large remaining balances (Helleiner).
One of the most successful examples of local currency is the Berkshares. It is a based on a principle of reciprocity versus exchange that fosters a collective society with a focus on community development. This currency has taken off in the Berkshire area of Massachusetts. It is a simple system with actual bank branches. A person comes into the branch and hands $95 to the teller and receives $100 Berkshares. The money can be of course reconverted as necessary. This system provides more of a bang for the buck by offering a positive exchange rate, and it allows people to shop local and stimulate the local economy. This currency has proven to be rather successful as over $2 million worth has been circulated. It has spread to other areas in Massachusetts such as Pittsfield and even to places in New York and Connecticut. The Schumacher Society, the founders of the Berkshares, are looking to continue the expansion and back the currency up with commodities such as apples, firewood, or even wind power (Helleiner).
Other systems of local currency can include time bank systems like those found in New Haven, CT. The SHARE Haven Time Bank allows people to accumulate hours if they commit to a service for the community or an individual. Whether it is walking a dog or doing plumbing work, individuals can use their hours to have other provide similar services for them (Helleiner).
More can be done for these businesses by allowing investors to get back products from the business. A deli in Massachusetts raised capital by giving people “Deli Dollars” which would allow individuals to redeem them for meats in the Deli (Helleiner).
The benefits of keeping money in the local community are quite big. Money stays locally allowing for the development of the town. The New Economics Foundation found that buying from a farmer’s market versus a traditional supermarket means that twice the amount of money would stay in the community. This means local purchases are at least twice as efficient in keeping the local economy alive. Instead of supporting large corporations that have terrible work conditions for people in the developing world, allow for harmful environmental practices through the production of goods, or simply support the enormous pollution provided by the shipping industry, consumers can keep their local businesses alive (McKibben).
Other possibilities-
Local currency and time banks are truly powerful tools, but they can be more powerful if other programs are added. Our politicians are touting small businesses as the solution to the economic crisis, so let’s make it happen:
· Energy efficiency programs- Sacramento CA, invested $59 million to save on electricity which enabled citizens save almost the same amount. This helped to create 880 jobs and increased income in the area by $124 million (Hawken).
· Tax credits for energy reduction- States can provide tax credits for home owners that reduce their energy use by a certain percentage such as 15%. Local energy companies provide energy usage on their bills, so this can be used as proof. Tax credits will allow individuals to have a larger disposable income and will provide an incentive to reduce power consumption.
· Business mentoring programs- Local Chamber of Commerce offices or town halls could provide space for monthly meetings of business leaders in the community teaching newcomers how to run their businesses. This could reduce the failure rate of new businesses (Hawken).
· Microcredit- There are a lot of low-income individuals with the skills and knowledge to start a business, but they lack the capital. Microloans can help these individuals jumpstart their businesses. Successful community members can provide low-interest loans and continue to do so as repayments are made (Hawken).
· Eliminate some tax-supported services- There are a lot of overlooked programs provided to citizens through taxes such as trash collection. Municipalities can eliminate these services and reduce taxes. If individuals have to “pay by the can” to get rid of their trash, they might think otherwise of disposing everything in sight.
· Reusing building materials- Instead of just obliterating a building, business can reuse its components and infrastructure. Southern California Gas saved $3.2 million or 30% of its construction costs on a new building by making use of this strategy. Over 80% of the building was composed using these recycled materials (Hawken).
· Building educational complexes- Instead of building schools far apart from each other, towns could build educational complexes similar to college campuses. This would allow schools to share buses, office spaces, and more. This would reduce greenhouse emissions.
The Stakeholders
The list of stakeholders in a more green economy is quite numerous. Corporate giants such as Wal-Mart and Nike do not want mom and pop stores or local economies to get in the way. They are gigantic retailers profiting from cheap labor and globalization. The federal government, state governments, and municipalities are other stakeholders. A lot is riding on them to put policies forward such as rebates and tax breaks to allow the green economy to move ahead. Without subsidies and tax rebates, products such as solar energy generators are not inexpensive enough to attract consumer demand. The federal government is currently facing pressure from the American constituency to produce more jobs and get the economy moving forward. This has caused much needed policy such as environmental reform to be put on the back burner. A sense of urgency needs to be created to connect the environment to jobs. Other stakeholders include small business owners and the citizens of the towns. Small business owners would benefit drastically from people spending locally. They would be able to make more profits and hire more people. This would help in revitalizing communities and keep jobs in local hands. Ordinary citizens would contribute in this process by buying local.
Barriers to Advances
Initiatives at a federal level face political barriers. Currently, our Congress is quite divided. With the recent surge of Republican victories, Democratic victories aren’t a sure thing. Fortunately, the CCC like initiative I outlined could receive bipartisan approval since it is pure job creation. As the economic recovery continues to be slow, constituent pressure mounting on Congress could bring action.
The state and local fixes I have outlined are more confined to suburban towns looking to bring in business and economic growth. These areas also need to be fairly liberal in regards to environmental policy. Initiatives like local currency require a sense of community and strong local cohesion. The town or area needs to realize the negative effects of globalization on their communities. Also, green products such as generators and solar power are expensive. They need subsidization and demand from consumers. A serious problem with these technologies is the lack of information surrounding them. Many people are just uninformed that these technologies exist and that they could be cost effective.
Gabel, Medard. "The Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems." World Future Review 1.1 (2009): 78-79. Academic Search Premier. EBSCO. Web. 26 Nov. 2010.
Hawken, Paul, Amory Lovins, and L. Lovins. "RMI: Natural Capitalism." Driving the Efficient Use of Resources. Rocky Mountain Institute, 2010. Web. 26 Nov. 2010. <http://www.rmi.org/rmi/Natural Capitalism>.
Helleiner, Eric. "Think Globally, Transact Locally: Green Political Economy and the Local Currency Movement." Global Society: Journal of Interdisciplinary International Relations 14.1 (2000): 35-51. Academic Search Premier. EBSCO. Web. 26 Nov. 2010.
McKibben, Bill. "A BANG FOR YOUR BUCK IN THE BERKSHIRES." Yankee 74.5 (2010): 93-95. Academic Search Premier. EBSCO. Web. 26 Nov. 2010.
Parenti, Michael. Democracy for the Few. 9th ed. Boston: Wadsworth Cengage Learning, 2008. Print.
Snyder, Michael. "24 Statistics About The United States Economy That Are Almost Too Embarrassing To Admit." Money Game.
Restoring Our Economy the Green Way
Our Downward Spiral
The U.S. economy used to be the most dominant in the world, but now it is falling fast. These are some eye-opening statistics provided by CBS Market Watch and the Business Insider (Snyder):
· 10 years ago, the US was No. 1 in average wealth per adult. In 2010, the US ranked 7th
· In the 2009 "prosperity index," the US was ranked the 9th most prosperous country in the world -- down five places from 2008
· The economy of India is projected to become larger than the US economy by 2050
· One prominent economist says that the Chinese economy will be 3 times as big as the US economy by 2040
· The US has lost a staggering 32% of its manufacturing jobs since 2000
· U.S. News - In 1980, the US imported approximately 37% of its oil. Now it imports nearly 60% of its oil
· Today, the US spends approximately $3.90 on Chinese goods for every $1 that China spends on US goods
· The US has the 3rd worst poverty rate among the advanced nations tracked by the OECD
· Since the Federal Reserve was created in 1913, the US dollar has lost over 95% of its purchasing power
We are currently in one of the most turbulent economies since the Great Depression. Why not fix our economy on the federal, state, and local levels the green way? There are several ways to bring our towns and country out of economic disaster that include a mobilized-youth employment group, subsidies, tax credits, local currencies, community agriculture, and prison employment programs.
What Can Be Done?
The Federal Level:
The current political climate with a divided Congress makes it rather difficult to achieve any legislative victory on a federal level, so I have focused more on the local level for a sustainable local economy.
What is a green economy? A green economy is economic activity with reductions in energy use and improving the quality of our environment. The federal government needs to pave the way for such an economy. A study done by Berkeley has shown that green businesses are in need of government aid in the form of tax credits, subsidies, and low-cost loans in order to help spark the demand for green products (Chapple). The Obama administration has made some headway in this regard through the 2009 American Recovery and Reinvestment Act. The Act has provided (DOE):
The Obama administration could have gone farther and directed the recovery efforts to focus on green jobs. FDR had the New Deal, and this seems to be a similar attempt. Creating green jobs can range from installing household solar heating, generators, weatherizing homes and so on. This would provide construction workers, plumbers, electricians, and other people with paychecks that will stimulate the economy and a long-term benefit of a more sustainable world (Gabel).
A personal solution to creating green jobs crossed my mind when I thought back to the FDR era. FDR created the Civilian Conservation Corps (1933 to 1942) for unemployed men whom were 18-25. This organization put the men to work on conservation and development projects that focused on natural resources. The CCC provided jobs for over 3 million Americans (Conservation). The Obama administration could do the same as the 2009 unemployment rate for 16 to 24 year olds was at over 18% (Coy). Young people ages 18 to 25 could be mobilized to do farm work, support community gardens, weatherize homes, and so on.
The State and Local Level:
Local Currency-
Many local economies fall into the trap of continuous business recruitment and community expansion in an attempt to build prosperity. This can lead to failed attempts at recruitment or even more costs that outweigh any of the benefits. Wal-Mart is a perfect example of this. It has received over $1 billion of public money from local and state governments and free land, water, sewerage service, subsidies, and property tax breaks. From 1980 to 2004, it has received $625 million from local and state governments to open up stores in their municipalities. Ironically, these governments have to provide public assistance (food stamps, etc.) for these workers in the range of hundreds of millions of dollars since Wal-Mart does not pay its workers enough (Parenti).
Local currency is a great tool to keep commercial transactions on a local level and encourage the development and use of local resources. The great part about local currency is that it has the ability to provide low-income individuals with interest-free credit and this encourages the wealthy to spend rather than save and accumulate more wealth. A famous economist, Silvio Gesell, has argued that interest-accumulating currency has been the cause of our boom and bust economic cycles. Most local currency has a limit on debt taken on and others function on peer pressure. Loans might not be given if certain individuals do not pay back balances, or a list is published of those who have large remaining balances (Helleiner).
One of the most successful examples of local currency is the Berkshares. It is a based on a principle of reciprocity versus exchange that fosters a collective society with a focus on community development. This currency has taken off in the Berkshire area of Massachusetts. It is a simple system with actual bank branches. A person comes into the branch and hands $95 to the teller and receives $100 Berkshares. The money can be of course reconverted as necessary. This system provides more of a bang for the buck by offering a positive exchange rate, and it allows people to shop local and stimulate the local economy. This currency has proven to be rather successful as over $2 million worth has been circulated. It has spread to other areas in Massachusetts such as Pittsfield and even to places in New York and Connecticut. The Schumacher Society, the founders of the Berkshares, are looking to continue the expansion and back the currency up with commodities such as apples, firewood, or even wind power (Helleiner).
Other systems of local currency can include time bank systems like those found in New Haven, CT. The SHARE Haven Time Bank allows people to accumulate hours if they commit to a service for the community or an individual. Whether it is walking a dog or doing plumbing work, individuals can use their hours to have other provide similar services for them (Helleiner).
More can be done for these businesses by allowing investors to get back products from the business. A deli in Massachusetts raised capital by giving people “Deli Dollars” which would allow individuals to redeem them for meats in the Deli (Helleiner).
The benefits of keeping money in the local community are quite big. Money stays locally allowing for the development of the town. The New Economics Foundation found that buying from a farmer’s market versus a traditional supermarket means that twice the amount of money would stay in the community. This means local purchases are at least twice as efficient in keeping the local economy alive. Instead of supporting large corporations that have terrible work conditions for people in the developing world, allow for harmful environmental practices through the production of goods, or simply support the enormous pollution provided by the shipping industry, consumers can keep their local businesses alive (McKibben).
Other possibilities-
Local currency and time banks are truly powerful tools, but they can be more powerful if other programs are added. Our politicians are touting small businesses as the solution to the economic crisis, so let’s make it happen:
· Energy efficiency programs- Sacramento CA, invested $59 million to save on electricity which enabled citizens save almost the same amount. This helped to create 880 jobs and increased income in the area by $124 million (Hawken).
· Tax credits for energy reduction- States can provide tax credits for home owners that reduce their energy use by a certain percentage such as 15%. Local energy companies provide energy usage on their bills, so this can be used as proof. Tax credits will allow individuals to have a larger disposable income and will provide an incentive to reduce power consumption.
· Business mentoring programs- Local Chamber of Commerce offices or town halls could provide space for monthly meetings of business leaders in the community teaching newcomers how to run their businesses. This could reduce the failure rate of new businesses (Hawken).
· Microcredit- There are a lot of low-income individuals with the skills and knowledge to start a business, but they lack the capital. Microloans can help these individuals jumpstart their businesses. Successful community members can provide low-interest loans and continue to do so as repayments are made (Hawken).
· Eliminate some tax-supported services- There are a lot of overlooked programs provided to citizens through taxes such as trash collection. Municipalities can eliminate these services and reduce taxes. If individuals have to “pay by the can” to get rid of their trash, they might think otherwise of disposing everything in sight.
· Reusing building materials- Instead of just obliterating a building, business can reuse its components and infrastructure. Southern California Gas saved $3.2 million or 30% of its construction costs on a new building by making use of this strategy. Over 80% of the building was composed using these recycled materials (Hawken).
· Building educational complexes- Instead of building schools far apart from each other, towns could build educational complexes similar to college campuses. This would allow schools to share buses, office spaces, and more. This would reduce greenhouse emissions.
The Stakeholders
The list of stakeholders in a more green economy is quite numerous. Corporate giants such as Wal-Mart and Nike do not want mom and pop stores or local economies to get in the way. They are gigantic retailers profiting from cheap labor and globalization. The federal government, state governments, and municipalities are other stakeholders. A lot is riding on them to put policies forward such as rebates and tax breaks to allow the green economy to move ahead. Without subsidies and tax rebates, products such as solar energy generators are not inexpensive enough to attract consumer demand. The federal government is currently facing pressure from the American constituency to produce more jobs and get the economy moving forward. This has caused much needed policy such as environmental reform to be put on the back burner. A sense of urgency needs to be created to connect the environment to jobs. Other stakeholders include small business owners and the citizens of the towns. Small business owners would benefit drastically from people spending locally. They would be able to make more profits and hire more people. This would help in revitalizing communities and keep jobs in local hands. Ordinary citizens would contribute in this process by buying local.
Barriers to Advances
Initiatives at a federal level face political barriers. Currently, our Congress is quite divided. With the recent surge of Republican victories, Democratic victories aren’t a sure thing. Fortunately, the CCC like initiative I outlined could receive bipartisan approval since it is pure job creation. As the economic recovery continues to be slow, constituent pressure mounting on Congress could bring action.
The state and local fixes I have outlined are more confined to suburban towns looking to bring in business and economic growth. These areas also need to be fairly liberal in regards to environmental policy. Initiatives like local currency require a sense of community and strong local cohesion. The town or area needs to realize the negative effects of globalization on their communities. Also, green products such as generators and solar power are expensive. They need subsidization and demand from consumers. A serious problem with these technologies is the lack of information surrounding them. Many people are just uninformed that these technologies exist and that they could be cost effective.
Links:
Green Economy: http://en.wikipedia.org/wiki/Green_economy
“Rocky Mountain Institute is an independent, entrepreneurial nonprofit think-and-do tank™ that drives the efficient and restorative use of resources.”http://www.rmi.org/rmi/
CBS Video on Berkshares: http://www.youtube.com/watch?v=KoVCozG84mY
U.S. Department of Energy: http://www.energy.gov
Ithicaa Hours: http://www.ithacahours.com/
Berkshares: http://www.berkshares.org/
Time Banks: http://www.timebanks.org/
LETS: http://en.wikipedia.org/wiki/LETS
Images:
Tree: http://eco-officegals.com/2010/10/12/earth-talk-building-a-green-economy/
White House: http://www.randalpinkett.com/speaking/speaking_2009.asp
People Working: http://www.worldpulse.com/pulsewire/solutions/11481
CT Capitol: http://www.ct.gov/dds/cwp/view.asp?a=3&q=332338
Somers Sign: http://www.somersct.gov/somersabout.cfm
Berkshares: http://wandervogeldiary.wordpress.com/2010/07/
Weatherization: http://www.prompthvac.com/weatherization.html
Happy People: http://hondacolumbiasc.com/
Sources:
Chapple, Karen, Cynthia Kroll, and Sergio Montero. Green, Local, and Growing. Berkeley, CA: The Center for Community Innovation, Jan. 2010. PDF.
"CONSERVATION: Poor Young Men." Breaking News, Analysis, Politics, Blogs, News Photos, Video, Tech Reviews - TIME.com. Time, 06 Feb. 1939. Web. 27 Nov. 2010. <http://www.time.com/time/magazine/article/0,9171,771421,00.html>.
Coy, Peter. "The Lost Generation." Business News, Stock Market & Financial Advice. Businesswwek, 08 Oct. 2009. Web. 26 Nov. 2010. <http://www.businessweek.com/magazine/content/09_42/b4151032038302.htm>.
"DOE Environmental Management Sites/Locations." U.S. Department of Energy. U.S. Government, 28 May 2010. Web. 26 Nov. 2010. <http://www.em.doe.gov/pages/siteslocations.aspx>.
Gabel, Medard. "The Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems." World Future Review 1.1 (2009): 78-79. Academic Search Premier. EBSCO. Web. 26 Nov. 2010.
Hawken, Paul, Amory Lovins, and L. Lovins. "RMI: Natural Capitalism." Driving the Efficient Use of Resources. Rocky Mountain Institute, 2010. Web. 26 Nov. 2010. <http://www.rmi.org/rmi/Natural Capitalism>.
Helleiner, Eric. "Think Globally, Transact Locally: Green Political Economy and the Local Currency Movement." Global Society: Journal of Interdisciplinary International Relations 14.1 (2000): 35-51. Academic Search Premier. EBSCO. Web. 26 Nov. 2010.
McKibben, Bill. "A BANG FOR YOUR BUCK IN THE BERKSHIRES." Yankee 74.5 (2010): 93-95. Academic Search Premier. EBSCO. Web. 26 Nov. 2010.
Parenti, Michael. Democracy for the Few. 9th ed. Boston: Wadsworth Cengage Learning, 2008. Print.
Snyder, Michael. "24 Statistics About The United States Economy That Are Almost Too Embarrassing To Admit." Money Game.
Business Insider, 13 Oct. 2010. Web. 27 Nov. 2010. <http://www.businessinsider.com/24-statistics-about-the-united-states-economy-that-are-almost-too-embarrassing-to-admit-2010-10#>.